Why Fairtrade isn't fair

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Fairtrade is extraordinarily successful at making wealthy westerners feel that they are warm, caring people. However there are a lot of reasons to doubt whether it is of much benefit to farmers in the Third World. It is argued, in fact, that it harms far more farmers than it helps.

'Ethical Objections to Fairtrade' is based on the knowledge that if aid is diverted from the poorest and most needy, it causes death and destitution. This paper shows the damage Fairtrade does to the vast majority of farmers, those who do not belong to Fairtrade. It also shows that most of the extra money that charitable people pay for Fairtrade never gets to the intended recipients. There are no impact studies showing that Fairtrade farmers in general benefit, let along other farmers. Much of the trade is a criminal offence under EU law. Published in the Journal of Business Ethics. Reprinted as Griffiths, P. (2013). Ethical Objections to Fairtrade. In Mark Tadajewski, & Robert Cluley, New Directions in Critical Marketing Studies. SAGE.

'Marketing by Controlling Social Discourse: the Fairtrade Case' shows how a non-conventional marketing strategy is used by the owners of a not-for-profit code of practice, Fairtrade. People buy Fairtrade branded goods because of the social discourse around it – what friends, newspapers, teachers and others tell them about what it guarantees, what it achieves and what is its social acceptability – rather than because of the advertising. The social discourse - what people believe - is favourable to Fairtrade but bears little relation to observable fact.   Methods used by the brand owners and others to control and manipulate the social discourse are identified. Published in Economic Affairs, 2015 35(2) 256-271.

 Fairtrade in Schools: teaching ethics or unlawful marketing to the defenceless? (pdf) Schools in the UK teach pupils about Fairtrade as part of Religious Education, Personal and Social Education, Citizenship, Geography etc. There are also Fairtrade Schools, where the whole school, including staff and parents, is committed to promoting the brand. It is argued here that promoting this commercial brand to schoolchildren and using the schoolchildren to press adults to buy a product amounts to indoctrination using criteria of intent, methods of teaching, and the subject matter. This conflicts with educational goals. It is also shown to be akin to the criminal offence of Unfair Trading: the methods used in teaching used would be unacceptable in normal commercial marketing. A completely separate criticism, based on a wide range of research evidence, is that the schools mislead by giving false information and by suppression of relevant information, again akin to the criminal offence of Unfair Trading. The question of who has the responsibility for preventing such actions is considered. Published as Griffiths, P., 2014. Fairtrade in Schools: teaching ethics or unlawful marketing to the defenceless?. Ethics and Education, DOI:, 9(3) DOI 10.1080/17449642.2014.978122, pp. 369-384. http://www.tandfonline.com/doi/full/10.1080/17449642.2014.978122.

More failings in Fairtrade research. Generous consumers pay £1 billion a year extra for Fairtrade products. Nearly all this extra money is pocketed by firms in the rich countries. Most of what is left is spent on extra operating costs incurred in producing Fairtrade, and some Fairtrade cooperatives make a loss from their Fairtrade membership. Any money left over is spent on social products which may have no economic impact. The farmers do not receive a higher price for Fairtrade  and may receive a lower price. Their costs when producing Fairtrade  are, however, higher, so their net income is lower. All these established facts contradict the assumptions in the recent paper by Tedeschi and Carlson, so their argument is incorrect. Published in the Journal of International Development

BBC World Business Report My criticisms lead the report. Fairtrade Foundation UK will not appear on a platform with me because I produce hard research evidence. So they got someone from the Netherlands. Note that he does not give figures for extra amount paid by consumers, amount going to the Third World, or any extra amount paid to farmers. Nor does he suggest that there is any impact study meeting the standards of the development agencies (there are not). And he does not mention that the Chief Executive of Fairtrade International, and academic researchers, have said that the auditing and monitoring of the system is woeful.

'Lack of Rigour in Defending Fairtrade' (published in Economic Affairs) shows some of the mistakes and lack of logic of the Fairtrade proponents, using the example of Alastair Smith.

Rejoinder: False Statements, Misrepresentation and Distortion in Defending Fairtrade, (summarized in Economic Affairs) shows some of the very poor scholarship that sometimes appears.

Refutation: Does Fair Trade deliver on its Core Value Proposition? shows some more very poor scholarship, by Arnould, Plastina and Ball (2009).



Peter has spoken on Fairtrade

Why Fairtrade isn't fair

What happens to the money?

Who is telling the truth, Peter Griffiths or Fairtrade?


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Some articles on Fairtrade

In a wide-ranging review of research on Fair Trade, Laura Raynolds of Colorado State University found that ‘there is surprisingly little research that documents how individual producers, producer organizations, grower households and communities benefit.’ Raynolds, Laura T. (2002) ‘Poverty alleviation through participation in Fair Trade Coffee Networks: existing research and critical issues. Eight years later she still can come up with no hard evidence.

Marc Sidwell, Unfair Trade, Adam Smith Institute, London 2008. http://www.adamsmith.org/publications/economy/unfair-trade-20080225961/ 

Philip Booth, The Economics of Fairtrade: a Christian perspective. http://www.iea.org.uk/record.jsp?type=book&ID=437

Colleen Berndt, Is Fairtrade in Coffee Production Fair and Useful? – Evidence from Costa Rica and Guatemala and Implications for Policy. George Mason University. http://www.chaight.com/Research.htm [now Colleen Haight].

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